The Morrison Government has extended its Coronavirus SME Guarantee Scheme to support small and medium business come out of COVID-19 hibernation.
Announcing the scheme in March, the government - partnered with 44 approved lenders - has so far guaranteed 50% of new unsecured loans for 15,600 businesses worth $1.5 billion.
The next phase of the scheme will see the following key changes come into effect:
- Extending the purpose of loans able to be provided beyond working capital, such that a wider range of investment can be funded;
- Permitting secured lending (excluding commercial or residential property);
- Increasing the maximum loan size to $1 million (from $250,000) per borrower;
- Increasing the maximum loan term to five years (from three years); and
- Allowing lenders the discretion to offer a repayment holiday period.
In a statement the government said that the changes to the program will allow businesses to invest in their future.
"The extended terms of the scheme will enable lenders to continue supporting Australian small businesses when they need it most.
"The expanded scheme will shift from providing access to working capital to helping businesses stay afloat during the crisis to now also enabling them to access more affordable and longer term credit so that they can invest for their future," the government said.
The initial phase of the program remains available for new loans issued by eligible lenders until 30 September 2020.
The second phase of the scheme will start on 1 October 2020 and will be available until 30 June 2021.